- Chinese crypto mining company BIT Mining has expanded its operations into Ethiopia, capitalizing on the country’s low energy costs
- BIT Mining is repurposing older Bitcoin mining machines to optimize profitability in the new location
- This strategic move aims to enhance BIT Mining’s global presence and operational efficiency
Chinese crypto mining company BIT Mining has expanded operations by opening up in Ethiopia, leveraging the nation’s affordable energy resources to boost its mining operations. By deploying older mining equipment in Ethiopia, the company seeks to maximize returns while extending the lifespan of its hardware. The move illustrates how crypto mining companies are looking further afield for financially advantageous locations in which to operate.
Leveraging Ethiopia’s Energy Landscape
BIT Mining’s decision to establish operations in the country in a $14 million deal is influenced by favorable conditions, chiefly its abundant and cost-effective energy supply, which presents a significant advantage for energy-intensive industries like crypto mining.
As well as newer machines being cheaper to run, this move gives life to older, less cost-effective machines, with BIT Mining redeploying older equipment in its Ethiopian facilities. These machines, which may be less efficient in regions with higher energy costs, can operate profitably in Ethiopia due to the lower electricity expenses. This strategy not only reduces electronic waste but also optimizes the company’s asset utilization.
Dr. Youwei Yang, BIT Mining’s Chief Economist, explained the benefits to CoinDesk:
The price of electricity is maybe 70% higher in Ohio than in Ethiopia, sometimes almost double, so it can only run very advanced ASICs, like the newest or second newest generations. Now we can just move older generation machines into Ethiopia.
Crypto Miners Thinking Outside the Box
Chinese crypto miners have been using Ethiopia for mining for some time; in 2023, it was revealed that of the 21 crypto mining companies that had secured agreements with Ethiopia’s state-owned power utility, 19 were Chinese. 92% of Ethiopia’s electricity supply comes from hydroelectricity, while its moderate climate provides favorable conditions for mining operations.
Just two weeks ago, the country announced that it was leveraging the renewable energy capacity of the Grand Ethiopian Renaissance Dam (GERD) to power Bitcoin mining operations rather than allowing the energy to go to waste.
